Look­ing for a so­lu­tion

Pres­sure grows for per­ma­nent fix to doc pay for­mula

Modern Healthcare - - THE WEEK IN HEALTHCARE - Rich Daly

Both a con­gres­sional deficit panel and com­mit­tees with ju­ris­dic­tion over Medi­care are con­sid­er­ing plans to fix its physi­cian pay­ment for­mula, which faces a huge drop at the end of the year.

The Obama ad­min­is­tra­tion moved the Medi­care physi­cian re­im­burse­ment re­duc­tions one step closer to re­al­ity last week when it fi­nal­ized the size of the pay­ment re­duc­tion— 27.4%— re­quired un­der the pro­gram’s cost-con­trol fund­ing for­mula. That cut is slightly smaller than the 29.5% cut pre­vi­ously ex­pected but physi­cian ad­vo­cates said it would be equally ru­inous to physi­cians.

Those loom­ing cuts have spurred grow­ing pres­sure from provider groups to over­haul the physi­cian pay­ment sys­tem by re­plac­ing the sus­tain­able-growth rate with other mod­els that do not con­trol costs through across­the-board clin­i­cian cuts. As the CMS is­sued the fi­nal Medi­care physi­cian fee sched­ule for fis­cal 2012, HHS Sec­re­tary Kath­leen Se­be­lius is­sued a state­ment call­ing for a per­ma­nent “doc fix” and pledg­ing that the Obama ad­min­is­tra­tion would “work with leg­is­la­tors on both sides of the aisle to ad­dress this is­sue once and for all.”

Ham­mer­ing out a so-called doc fix is one of the goals of the deficit re­duc­tion su­per­com­mit­tee, said House Speaker John Boehner at a Nov. 3 news con­fer­ence. That was the first con­fir­ma­tion by a con­gres­sional leader that the panel—charged with find­ing at least $1.2 tril­lion in deficit re­duc­tion by Nov. 24—would in­clude any SGRre­lated pro­vi­sion.

How­ever, Boehner stressed that whether the panel in­cludes a tem­po­rary de­lay in the Medi­care provider cut or a per­ma­nent re­place­ment of the SGR for­mula “is still up in the air.”

The panel would face chal­lenges and op­por­tu­ni­ties in ad­dress­ing the physi­cian fee sched­ule, ac­cord­ing to lob­by­ists track­ing the is­sue. The main ad­van­tage is that the com­mit­tee is au­tho­rized to cre­ate a mas­sive deficit pack­age that can in­clude any­thing with­out fac­ing the threat of amend­ments or a fil­i­buster.

Re­plac­ing the SGR for­mula, how­ever, could com­pli­cate the work of the deficit panel be­cause it would re­quire iden­ti­fy­ing $293 bil­lion in additional cuts or tax in­creases over 10 years to off­set the es­ti­mated cost. And mem­bers of Congress and other ad­vo­cates are also push­ing for the deficit panel to ad­dress a num­ber of un­re­lated is­sues, and in­clud­ing an SGR fix might pres­sure the panel to ad­dress those, too.

Apart from the su­per­com­mit­tee, the three com­mit­tees with ju­ris­dic­tion over the is­sue also are work­ing on their own doc fix, ac­cord­ing to con­gres­sional sources, and they ex­pect to pro­duce a plan within the next four weeks. How­ever, it re­mains un­clear whether those com­mit­tees are con­sid­er­ing a tem­po­rary or per­ma­nent fix to the Medi­care physi­cian pay is­sue.

Congress ap­pears in­creas­ingly likely, ac­cord­ing to many physi­cian ad­vo­cates, to even­tu­ally ap­prove a two-year, $26 bil­lion freeze of the cur­rent pay­ment rates while a long-term so­lu­tion is ne­go­ti­ated.

Any per­ma­nent re­place­ment would need to iden­tify a broadly sup­ported pay­ment sys­tem and find a way to pay for scrap­ping the SGR. There are a grow­ing num­ber of al­ter­na­tives pro­posed to the tra­di­tional Medi­care physi­cian pay­ments for each ser­vice, in­clud­ing wide­spread use of bun­dled pay­ments for episodes of care or ex­empt­ing physi­cians from pay­ment cuts if they use al­ter­na­tive care ap­proaches, such as the med­i­cal home model.

The more con­tro­ver­sial ques­tion that most mem­bers of Congress and the Obama ad­min­is­tra­tion have shied away from is how to pay for eras­ing the nearly $300 bil­lion, 10year cost of scrap­ping the SGR.

The Medi­care Pay­ment Ad­vi­sory Com­mis­sion was one of the few to do so when it for­warded a plan to Congress last month that would cut pay­ments to spe­cial­ists for sev­eral years and re­quire drug man­u­fac­tur­ers to give re­bates to Medi­care Part D plans for drugs fur­nished to low-in­come ben­e­fi­cia­ries, among other off­sets. That pro­posal was blasted by some of the provider ad­vo­cates and mem­bers of Congress who are most adamant in call­ing for an SGR re­place­ment.

Ul­ti­mately, the best mo­ti­va­tor for a longterm fix this year, ac­cord­ing to provider ad­vo­cates and health­care pol­icy ex­perts, may be the math­e­mat­i­cal cer­tainty that elim­i­nat­ing the sys­tem will grow more ex­pen­sive with each year it is de­layed.

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